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The Global Economic Framework PDF

   

Added on  2021-06-18

10 Pages2222 Words41 Views
Running head: ECONOMIC POLICIES AND GLOBAL ENVIRONMENT Economic Policies and Global EnvironmentName of the StudentName of the UniversityAuthor Note

ECONOMIC POLICIES AND GLOBAL ENVIRONMENT 1Introduction The global economic framework has changes considerably over the years and hasfaced considerable dynamics, much of which can be attributed to the internationalphenomena like Globalization, Liberalization, industrial revolution as well as technologicaland infrastructural framework across the global scenario (Salvatore and Brooker 2015). Overthe years, different countries in the global framework, have developed immensely in theeconomic domain, thereby emerging as globally dominant economics in the internationalframework. In this context, the economic development and prosperities of different countries arehighly attributed to the industrial, commercial prospects which the countries enjoy, thegeneration of employment scopes, increase in the overall productivity of the country as wellas presence of a stable and efficient economic policy frameworks present in the countries.There exist different components in the macroeconomic policies which are usually used bythe government of a country as per time and requirements (Mankiw 2014). Keeping this into consideration, the concerned essay tries to highlight and discuss thedifferent macroeconomic policies which the governments of different countries take forensuring long term growth in the economy as well as for maintaining macroeconomicstability in the economy in the short run. Macroeconomic Policies for Long Run Growth The economic policy framework of any country, in general, consists of two broadtypes of policies- the fiscal policies and the monetary policies: Fiscal Policies- These are the policies by which the government varies its expenditures andtax collections, mainly, to influence the economy of the concerned nation, which in turn

ECONOMIC POLICIES AND GLOBAL ENVIRONMENT 2influences the macroeconomic variables like aggregate demand, aggregate supply,investments, savings and distribution of income in an economy (Borio 2014). Monetary Policies- These forms of economic policies are usually designed and implementedby the monetary authorities of the concerned countries, which primarily include policies tomanage the money supply and money demand in the country as well as the liquidity in theeconomy, mainly in terms of variables like the rate of interest in the economy. Keeping these into consideration, the following section of the concerned essay discusses thedifferent macroeconomic policies which the government of different countries can implementfor ensuring economic growth in the country: Increasing productivity in the country The primary indicator of positive economic growth in a country is the increase in theeconomic productivity in a country, which is mainly observed in the form of higher andincreasing GDP trends in the country (Heijdra 2017). This, can be ensured in the long run, bythe government of a country by ensuring consistent increase in the long run aggregate supplyand aggregate demand in the economy, which falls under the fiscal framework, which can beshown with the help of the following figure:

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